Siemens IT Services to cut 1,750 jobs worldwide

Follows the sale of the division to Atos Origin for &pound;721 million (US$850 million)

LONDON, 15 DECEMBER 2010 - Siemens is planning to cut 1,750 jobs from its IT Solutions and Services business after it sold the division to Atos Origin for 850 million (£721 million).

The cuts, which will be made across the global operations, will include 650 redundancies in Germany. Siemens declined to provide a further breakdown for the UK, but said that roles will be mainly in indirect functions such as "G&A" (general and administration). The division expects to have approximately 28,000 employees at the transaction closing date of July next year.

Meanwhile, Siemens will contribute up to 250 million to the training costs and the costs of integrating the division with Atos Origin.

Atos Origin paid Siemens for its IT services division in a mixture of cash (186 million), a five-year convertible bond (250 million) and 12.5 million Atos Origin shares worth around 414 million.

Through its shareholding, Siemens will hold a 15 percent stake in Atos Origin for at least five years. As part of the transaction, the two companies have also signed a seven-year, outsourcing contract worth 5.5 billion to operate Siemens' IT infrastructure and applications worldwide.

Siemens and Atos Origin have also committed to invest 50 million each for the joint development of new IT products and solutions.

With combined 2010 revenues and employees of around 8.7billion and 78,500 employees worldwide, the new partners said they will be operating the largest managed services platforms in Europe. The new company is expected to generate revenues between 9 to 10 billion by 2013.

The transaction is expected to close by early July 2011, after antitrust approval, consultation with Atos Origin's Working Council and approval from Atos Origin shareholders.

Siemens IT Solutions and Services has been going through significant restructuring since March this year, when it announced the cull of 4,200 jobs worldwide.